1 ese were the statements of Benjamin phj

CASE 14
presideet1t ofJndChamber
Chief Executive Officer o a‘g':.;.'::'%f Romualdez,
of Mines of the Philippnes durig e oy
preside

CASE 14: Mining & Tours.

_distinguished """’flpanlfs mA:\nuaI
Mining & Tours: Building Consorti
Conference where
Mining practtioners,
mining incumbent and ormer cabine mempers. e
to Transfer Innovative Solution: overn! ment officials,
al
legislators, academicians, and ¢ *perts from local
organizations.
through Sustainable Tourism' d internation:
Evangeline Bengaro \ir. Romualdez further warned that:
About USDIG billion in mining investments that were
upposed © happen during this administration next will nat happen.
et me tell you niow that investments in the 3 year sl
SYNOPSIS ,
certainly dramatic ally go down... This regime wil simply kil
mining the mining industry... it would certainly pushposi the Philippine
The case describes the current situation of the Philippine
industry. It identifies key stakeholders' divergent perspectives that nining industry into @ most uncompetitive
make the industry uncertain, uncompetitive, and dysfunctional The Chamber of Mines of the Philippines is an association
In effect, this hinders the development of constructive dialogues ,dvancing the interest of mining, quarrying, and mineral processing
among key players in the industry. The challenge remains as 1o <ompanies for the efficient exploration, development, and utlzation
how to rally various stakeholders to communicate effectively and of minerals in consonance with sound economic, environmental, and
The concept of tourism is introduced,
achieve sustainable solutions.
suggesting it as a potential that could be utilized to build consortium <ocial policies. The association consists of members coming from
among stakeholders through the universal theme of sustainabiliy. exploration, mining, mineral processing, and services industries
ncluding professional associations. The members are united by a
Key words: mining, tourism, indigenous peoples, Chamber of Mines of <hared commitment to the principles of economic growth, sustainable
the Philippines, sustainable tourism, sustainable development development, and as government's partners in development.

“The greatest distance betuween peaple is misunderstanding. SHOULD TAXES BE RAISED?

Industry players asked the executive department to review
KILLING THE INDUSTRY the mining taxation scheme proposed by the Mining Industry
Coordinating Council (MICC). The MICC is a joint committee of the
Our companies are responsible stewards of the environment Economic Development Cluster and the Climate Change Cluster
and perfectly in tune with the cry of the times. The truth s, our created under Executive Order (EO) 79 tasked to formulate 2 new
government receives over half of the total value of a mining revenue sharing scheme between the government and mining
project based on the internationally accepted Average Effective companies. In a letter to the Office of the President, the Chamber of
Tax Rate (AETR). If they truly understand these issues, they will Mines of the Philippines (COMP) said the MICC did not consider their
probably come to a realization that their initial position might sugestions in formulating the revenue-sharing structure:
have been erroneous. If they can at least understand that, then
maybe there is some chance to arrive at a common ground. We are dismayed that the MICC had moved forward witha
proposed increased tax policy without taking into consideration.
comments and observations not only from the mining
Del Rosario, J. (2010). Top business risks in the mining industry. hitpuwi. industry that will be directly affected by the said policy but by
5v ph/managing-1isks-in-the-mining-and-metals-sector-by-jaime-f-del-rosan0- authoritative third parties. The MICC-proposed tax structure
october-20-2014/

N |
 Cannot, by any measure, be considered fair or equitable, 1ot SPOT
Jess competitive. [t will not attract quality investment thay
country needs to be able to develop its mineral resourceg e Philippines has a total land area
responsible manner. 1:‘:':: ' milion hectares are mu;';“,n““h":m.m
The Philippine government awards two types of mining
. This i3 expected 0 increase with o “’h“fl"fiw
v: ' geological mapping. The Philipines s rich n g
P07
the Mineral Production Sharing Agreement (MPSA) and the Fj o chromite, with total mineral reserves valyeq gy USDL387
billgn
Technical Assistance Agreement (FTAA). MPSAS are for firmg of September 2011, there were 730 large-sesje mining
0% locally-and 40% foreign-owned, while FTAAS permit 10 ::., | 418 applications being processed, with 27 Wm”““ m:‘
ownership. While both are subject to 2% excise tax, MPSAs in ) wo processing plants. There are 400,000 smallseny
reservations pay additional 5% royalty. FTAAS are subject g of the Philippinesare
companies. The top mineral exports copper,Shing
revenue-sharing. The new revenue sharing scheme will applyto i kel Major countries of destinationsr sp, Aty e
mining projects holding a Mineral Production Sharing Ag and China.
(MPSA) and Financial Technical Assistance Agreement (FTA),
For 2012, the Mines & Geosciences Bureau of the
of Environment and Natural Resourc es (DENE)
o ion worth of foreign investment in mining, But deapie U221
NNe,

SHIFTING POLICIES
promotion of the mining industry, investments stayed bt
The previous year at the Mining Conference, Benjamin Romug government’s target and the mining industry only. =
had somehow threatened to sue the government: about 1% of the annual GDP. Scoowmicd
The industry is shocked with Section 9 of the imple One country director of a large mining firm currentl y operats
L)

rules on EO 79, which mandates that the terms and condi pines said, “The Philippines is the third-most opcratng
of the second 25-year term of mining contracts would b country in the world. It is the most attractive, after South Afrca and
renegotiated by the government. This provision. effe
Pole X IR

Chile” However, with EO 79, it has been difficult for inves tors
shortens mining contracts to a mere 25 years in violation 10 do explorations and dete ‘magnificin
the rm e . to come:
ent potential
Section 32 of the Mining Act, which guarantees the minir
companies a second 25-year term under the same terms Miners are also contesting additional changes in the mapping—
conditions. This provision is patently illegal and contrary to the so-called no-go zone areas, or areas where mining activties wouid
the assurances of the government that mining contracts will be be restricted or prohibited. The business sector is not plcased with
respected. these results either as it renders around 85 percent of the country's
total land area off limits to exploration. Mineral reserves are located i
Mining firms consider the Implementing Rules and areas of rich biodiversity and within ancestral domains of indigenoes
(I%%) provision as shortening the 50-year term. RomualdezReg sai peoples.
follow up interview at the sidelines of the conference that mining fi
will take legal action. “They will sue; he told reporters. “Any
that [Mining Act]. they will sue. If they [government] will continue
i1, [a legal action] is being prepared”
 ol
THE INDIGENOUS PEOPLE GENOUS PEOPLES' RIGHTS
U

CASE 14: Mining & Tours

ING-
TINESAE

Cordilera Peoples Allance caling for respect for hee rights

ISHING

The Celebration of the 26th Cordillera Dy 2010: Advanc the Polfcs of ‘Surcn: Coutlor Prles Ao
eld Apri 25, 2010 of Mebin Jonss, Burnham Park, Baguio Gy
The Philippines is the only country in Southeast Asia that
Mining affects the strong cultural ties of indigenous communities ccognizes Indigenous Rights in the mining extraction. The Philippine
andleads 10 the loss of their culture and identity. Traditional concepts wining Act of 1995 states that: No ancestral lands shall be opened for 1
mining operations without prior consent of the indigenous cultural 1
T

and values of indigenous communities tend to erode when socio- ommunity concerned.
economic realities force people to look for alternative sources of
livelihood and when power relations within communities change, The: ‘The Indigenous Peoples Rights Act (IPRA) of 1997 obliges the state
divisive effects of mining show where positions vary between those o recognize, protect, and promote IPs rights to their territories to
ER

who strongly oppose mining and those who hope to benefit fromit preserve and develop their culture, traditions, and institutions; Free,
Communities are then divided between their responsibility to protect prior, Informed Consent (FPIC) must be facilitated by the National
their ancestral heritage and their prospects of economic development. Commission on Indigenous Peoples (NCIP) as the preliminary process
o start. mining activities. It further guarantees IPs rights to self-
For indigenous peoples (IPs), large-scale mining spells ‘death’and determination and to their ancestral territories, which empower them
displacement from their livelihood sources, aside from the loss of their tomanage and to decide over the use of the natural resources within
ancestral domains that were passed on to them by their ancestors. their lands. However, there are some weaknesses in the approval
Certain cases of large-scale mining practices in the country show how process of mining extraction which do not fully comply with the
the disrespect for local communities and their rights can lead to the principle of FPIC.
escalation and radicalization of resistance.
For years, NGOs and supportive politicians have been calling for
e revocation of the Mining Act of 1995, which promoted a private
sector-and foreign market-led, investment-driven exploitation of
resources,
 “SOCIAL LICENSE TO OPERATE” slobal tourism industry has adopteg gre followingg
e e tourism development:
ssustainable finition 1
o sstainable tourism
p \’:’ nt tourists and - development

CASE 14: Mining & Tours

capancing OPPOUNLY host regions whil:e;:ul:h:llu?e:::
Jcadin (0 MANIEEMENt OFfor the future. t i epygggey vt
cconoic, social and aesthetic all resources in suc 3 ey
ataining cultural integrity, needs can be ulfijeg gy
essential ecological
ig moscy
life support systems (Worproces,
ological diversity, and
1998) .
4nd Tourism Coun cil

Y TOURISM?
jisorically, there has often been an antagonistic elationship
spong the_government, Mining companies, Indigenous peopies,
Lvronmentalists, and civic organizations, deriving from es,
STAKEHOLDERS' DIALOGUE HELD (MGB-CAR) fepectiv values associated with public revenues, sound investment
~inescnd Geoscnces Bt - Crdilero Ackinstve Rgion (Merch 2017 “acestral domains, environmental protection, and appropriate meany
Savce: v 3 g g0/ Bpresseloases A skeholdesologuohd resource allocation. However, there has been an enormous change
"
‘The Philippine revised legislation provides that mining companies patitudes in recent years.
are now required to annually allot 15% of total operating costs for Recently. tourism's role in poverty alleiation has been siowly
Social Development Management Program purposes, compareg ecognized among development agencies. The industry's potential ty
3 with the previous allotment of 1% of direct and milling costs, The generate foreign exchange earnings, attract international investment,
“ Chamber of Mines of the Philippines recently issued a guidebook oy as incentive for
[rcrease tax revenues, and create new jobs, has served
¥ Corporate Sacial Respansibilty in an effort to help companies practic eveloping countries to promote tourism as an engine of growth (Lim
Y< responsible mining (Del Rosario, 2010). &De Guzman, 2007)
“License to operate” is not a picce of paper but an informal n addition to employment and business opportunities, tourism
community and stakeholder support for an organization's operation. deselopment often brings with it improved infrastructure, security,
Communication is critical to securing and maintaining it. Communities cnmunication, community development, and bolstered local pride
and stakeholders generally are likely to be more supportive of (Roc et al,, 2002).
companies that communicate openly and honestly about ther Nawral and cultural resources are the primary resources on
management and performance in relation to environmental, social, and wich tourism depends. These include not only the important
economic factors (Group of 100, 2003), ratral and cultural sites but also the intangible cultural heritage as
rpreseated by the unique customs, traditions, as wel as the arts and
THIRD FORCE: SUSTAINABLE TOURISM? s of ethnic minorities in the vicinity of these sites. Investments
1¢ needed for access and protection of infrastructures in natural,
The 1987 Brundiland Commission Report (WCED 1987) defined utural, and urban sites to strengthen the sustainable management of
sustainability as “development which meets the needs of the present ourism, which can also improve heritage management practices, toa
without compromising the ability of future generations to meet their ureinclusive approach to tourism development to accelerate poverty
own needs. wuction and reduce undesirable social impacts.
 OF THE TUNNEL « e Guzman. . (2007) ERD Technical Note No, ™fr pro-
LIGHT AT THE END e sustainable growth: Economic anayssofentopouns
i alayon Cit, Philippines:002) Asian Devei lopm Bank ™ 7
Mining companies that have succeeded both globally ang i

CASE 14: Mining & Tours

ef g; " o . Goodwin,i N sin L. & Ashehicy,y erC.(2ro-pooThe r Tourism B e T
Tourism

philippines are those that are able o truly anticipate and ess prim
risks nherent in the industry. Romualdez e
manaj e such
envirg e ponsibleandTourOver ionalentInsiInst
rnatlopm
ism,seasInteDeve tutcteor Lond gn oc ™~ o"¢
Emronros
that their industry recognizes the need to protect the Howeyer B opment
e develop communitics that host miningmustoperations.
also allow the ing, ac “""“(“‘,‘:Lfrcs, s“‘"'vl“r"
. P. (Septmber, mber,201 2012). Opening speech. Mining Phlippines
s 2012
emphasized that the government, in turn,
.
{o maximize the use of the country’s natural resources
note, inhis open
On a more positive and conciliatory that: OPening redits
statements during the conference, he stated
Phot
optim ism by maint ainin g Jups /s elesurty.net fenglish/news/Indigenous-Anti-Mining-Activist-
Te Chamber had kept their variou s
high levels of parti cipat ion among the indus trys html
lled-in-the-Philippines-20170124-0022
stukeholders..i ndeed ; minin g is for peopl e with a long-t erm 1ps:/www rappler.com/move-ph/10219-is-pnoy-snubbing-indigenous-
“iew. A country rich in minerals run by a government bent
INC-

peoples 2
on curbing corruption remains an_ attractive destination
SNV RE

forward to the enriching Jpsy/ redbrandog wordpress.com/2010/04/27/the-celebration-of-

for resource development. We lookaffect mining, specifically on cordilera-day-2010-advance-the-polities-of-change/
ISIING

discussions on various issues that

the way forwa rd for an indus try that has time and again proven up,//londonminingnetwork.org/2014/02/tampakan-mine-philippines-how-
s resilience in the most difficult circumstances to survive, to to-lose-money-and-terrify-people/
thrive, and to serve (Romualdez, 2012). Hitp:/avvew.carmgh gov.phy/8-press-releases,/46-stakeholders-dialogue-held
DT

Guide Questions.
What kind of leadership can Benjamin Romualdez exercise tote
effective in building consortium in the extractive industry?
Pt

In what ways can tourism serve as an innovative solution thit

the Chamber of Mines can utilize to maintain high levelso
perticipation among various stakeholders?

LEEEES
the Philippines.
Alampay, RB. (2005). Sustainable Tourism, Challenges andfor the
Philippine APEC Study Center Network (PASCN) Philippine
Institute for Development Studies (PIDS)
Del Rosario, 1. (2010). Top business risks n the mining industry. Retreved fon
hitp.//wrwvsgph,/managing-risks-in-the-mining-and-metals-sector
2014/
An Association of Australia’s senior Finance Executioes from
s Business Enterprises. (2003), Sustainability: A guide o U
i Group of 100 Incorporaied